If you have one or more county court or high court judgments against you which you cannot pay in full then an administration order can be issued to help you repay any debts you have based on what you can afford each month.
Which individuals are eligible for an Administration Order and what criteria you should meet...
To begin with, you must have at least one County Court or High Court judgment against you that you cannot pay in full
Your total debt must be less than £5,000
Your debt should be to at least two different creditors.
You need to prove that you will be able to pay a small installment every month and that you have the income to do so.
Administration Order application form
You need to visit the government website and fill in the N92 application form in order to apply for an Administration. After you have filled the application in you must bring the document to the local court.
The next step is for the court to decide the amount of money you need to repay, the level of monthly payments and the timeframe by which you need to repay your whole debt.
Keep in mind that each time you make a payment to your local court you will be charged a small fee which cannot be more than 10% of your total debt. For example, if you owe £3,500, it can’t be more than £350 in total.
All debts can be included in an Administration Order. This means that you can file for an Administration order also for mortgage or rent arrears. However, this will not prevent a landlord or mortgage lender from repossessing your home.
It is advisable to leave the rent arrears out of your administration order even if your landlord might be happy for you to include it in. This is especially the case for social flats where the tenants are in not a good financial situation and as such, they feel more secure that you will pay their rent.
What is it like to have an Administration Order?
An Administration Order is added to the Register of Judgements, Orders, and Fines for six years and will have a negative impact on your credit rating which will make it harder for you to get future loans.
This, however, is already an issue since if you had a court judgment getting credit is already difficult. Your creditors are not allowed to call you after the Administration Order is placed. However, they might continue to call you in which case you should inform them that they have no right to do so.
Make sure to not forget any of your creditors, this might make it hard for you to add them later in your order and they might continue to ask you for payments.
All debt solutions have both advantages and disadvantages which you should take into consideration before you apply for one.
Positive sides of an Administration Order
When you have an Administration order you will make only one single monthly payment which is much more manageable and less overwhelming.
Definitely, you will have less stress and more time
Creditors listed cannot take any further action against you without the Court’s permission
Negative sides of the Administration Order
You can obtain one only if you have at least one court judgment against you and have debt under £5,000
Falling behind on payments can enable the court to take money directly from your wages or even cancel the arrangement
Up to 10% of your total debt will be paid in additional fees for the court.
If your financial situation deteriorates either because you lost your job or something similar then you must notify the Court immediately. If for any reason it becomes hard for you to pay your monthly instalments you can ask the Court to review the order to lower your monthly amount.
If you miss two payments in a row, the court has the right to revoke the Administration Order. They will notify you and you must reply within 14 days.
Be careful if the Administration order is revoked your creditors will be able to contact you again and ask for their payments. They can also take legal action against you.
You need expert advice to make the best of the Administration Order. The Administration Order can be a very good solution for someone but taking into account the small amount of the debt we advise you to get help with managing and getting debt-free before you apply for an Administration Order.